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MSLGROUP Election Night Report

1.
Election Night Report
by Holly Feraci,
MSL Washington DC

2.
Historic election night is over! So what does this mean?
We have to look at the big picture. There were 435 elections in the House, 37 in the Senate, and 37
gubernatorial elections. People voted. Candidates won. Careers ended. Some races will go into
recounts others will take more time to determine. But we know that power in the U.S. House of
Representatives has shifted and margins are significantly tighter in the U.S. Senate.
Almost all Americans say the economy is in bad shape, and barely more than a quarter see it
improving at all. The official unemployment rate is 9.6 percent, though the true picture may be closer
to 17 percent. President Obama’s approval rating is about 45 percent.
The POLITICO/George Washington University Battleground Poll showed in late October that 64
percent of likely voters believe the country is on the wrong track, as opposed to just 29 percent who
say it’s headed in the right direction. Nearly three-quarters of all voters disapprove of the way the
Democratic Congress is handling its job, according to the new Post-ABC poll. More than seven in 10
now see the country as headed off course.
The congressional approval rating is below 20 percent—because the Democratic majority passed
health care reform when Americans were focused on their wallets. Democrats were not pragmatic
enough and did not recognize the need to balance their laudable agenda with Americans’ concerns
for too much spending and fears about the economy. Certainly there are lessons learned here for the
new Congress.
What happened?
Republicans picked up 60 seats, giving them a 239-196 seat margin. This is more seats than
Republicans have ever held in the modern era. In the Senate, the GOP picked up 6 seats, so the
Democrats maintain a 53-47 seat margin, slim enough to give Republicans “functional control” of the
Senate. There are a handful of races that are too close to call, which could change these numbers, but
this will not change the balance of power or historic nature of this election.
Republicans picked up 8 Governorships, again with several races to tight to call. Several hundred
state legislative seats switched to Republicans. About 15 state legislative chambers flipped to
Republican control, including AL House and Senate, NH House and Senate, IN House, PA House, OH
House and NC House. The governors and state legislatures will be key to redistricting and political
influence in 2012. Republicans also picked up OK AGs office and LT Gov. offices from Democrats.
Other notable wins are that Oklahoma will get their first woman Governor and New Mexico elected the
first woman, Hispanic Governor—both Republicans.
If there was any doubt about this election being a referendum on Obama/Pelosi/Reid policies one
need only look to the four Democratic Committee Chairmen that lost their seats. They are: Missouri
Rep. Skelton (Armed Services), South Carolina Rep. Spratt (Budget), Minnesota Rep. Oberstar
(Transportation+Infrastructure) and Arkansas Sen. Lincoln (Agriculture). In addition, Republicans
knocked off House and Senate stalwarts including: Texas Reps. Chet Edwards and Ciro Rodriguez,
Pennsylvania Rep. Kanjorski, Virginia Rep. Rick Boucher, Georgia Rep. Jim Marshall, Indiana Rep.
Baron Hill, North Dakota Rep. Pomeroy, Mississippi Reps. Travis Childers and Gene Taylor and
Wisconsin Sen. Feingold.
Americans overwhelmingly voted out Moderates or Blue Dogs who insisted they would vote against
Pelosi or support repeal of the new health reform law, but would continue to support and vote for the
Democratic leadership.
2

3.
What will the election mean for your issues?
Obama’s political landscape has shifted dramatically. This election was a referendum on the Obama/
Pelosi agenda and the economy. Obama may attempt to appear more moderate than he has by
supporting watered down, incremental approach to priorities. In reality, the President and even the
Senate Democratic leadership will not move to the center resulting in gridlock for most issues. The
sweeping legislation of healthcare & financial reform will give way to a bite-sized approach to energy/
climate, i.e. green technology and maybe a Renewable Electricity Standard, but gridlock on cap and
trade. An incremental approach to immigration, i.e. border security may also be in order.
The incremental approach is more suited to a deeply divided Senate; and is favored by WH chief-of-
staff (& old Senate hand) Rouse. We will here more about this today, when President Obama holds a
post-election news conference at the White House at 1pm Eastern.
What’s next?
Congress will return for a lame-duck session on November 15. A few of the new Senators can be
seated immediately, which changes the current assumptions about votes.
The one thing Congress must pass is an extension of the Continuing Resolution to keep the federal
government running at current levels beyond December 3, 2010. What else Congress will do has not
yet been determined.
Senate Democrats will hold their leadership elections at the end of November. Republican leadership
elections will be held in January.
Committee membership ratios, chairmanships and assignments will have to be determined. There
are many new Republicans that will go through orientation and that need to be assigned seats. Much
of this will occur in January.
First up on Republicans’ agenda
(1) rollback of discretionary spending levels to FY08 levels; there are a variety of ways Republicans
can do this; (2) pass an extension of the 2003 Bush tax cuts for all Americans; (3) repeal the new
health reform law. Republicans may lob a full repeal of health reform over to the Senate, knowing
it won’t pass; then try to repeal the most unpopular sections of the new law including the individual
mandate.
We will most assuredly see much more oversight of the Administration and oversight of
implementation of Financial and Healthcare Reform packages.
Republicans may force the Administration to veto several budgets before the President finally signs
one.

4.
In addition to issues discussed above, the following are just
some of the issues that could move out from under the radar
next year:
Leftovers from 2009/2010, which it is worth noting that some of these could sneak
into the Continuing Resolution or another bill before the end of 2010:
• Lifting the debt ceiling
• SGR Doc Fix/Physician Fee Schedule
• 2009 business, individual tax extenders
• Bush tax cuts (rates, estate tax, AMT, etc.)
• Complete DOD reauthorization
• Amendment to DOD to add the DREAM Act, which allows certain children of illegal
immigrants who come to the U.S. before the age of 16 a path to citizenship.
• Amendment to DOD to strike a provision from the authorization bill that would repeal the
‘Don’t ask, don’t tell’ policy
• “Buy America”
• Net Neutrality
• 3 Trade Agreements
• All 12 Appropriations bills
• Food safety/Nutrition (S 510)
• Stem cell research legislation (S 3766)
• Energy legislation/offshore drilling
• FAA Reauthorization
• Transportation Reauthorization
• Additional stimulus, infrastructure spending
• Easing trade and travel restrictions on Cuba (HR 4645)
• Chinese currency
“New” issues:
• Social Security Retirement Age
• Border Security
• Campaign Finance Law
• Green Technology, Ethanol and Biofuels Subsidies
• Corporation for Public Broadcasting Funding
• Eminent Domain
• Education reform/School Vouchers
• Congressional Pay Freeze/Cut
• Afghanistan Withdrawal
• Nuclear Power
• Gay Marriage Amendment
• Whistleblower Protections
• Arms Reduction Treaty
One thing is certain, the focus now turns to the 2012 election. Republicans have to reduce spending
and hold the line on taxes to keep voters happy going into 2012.
This MSL Policy Report was prepared by Holly Rocco Feraci, Vice President, Government Affairs. Questions about
this information can be directed to: Holly Feraci – 202.261.2872 (holly.feraci@mslgroup.com)